Stocks feel the weight of Apple; Dow’s up

S&P 500 briefly tops 1,500 intraday for first time since 2007

By

PolyaLesova

A previous version of this article gave the incorrect day for Apple’s earnings report. It was late Wednesday.

NEW YORK (MarketWatch) — The Dow Jones Industrial Average rose for a fifth day Thursday, helped by a round of economic data including jobless claims, while Apple Inc.’s worst day in four years sank the Nasdaq Composite.

The S&P 500
SPX, -0.55%
which like the Nasdaq counts Apple
AAPL, -0.45%
as its biggest component, squeaked out a 0.01 gain, its seventh straight advance.

The Dow average
DJIA, -0.67%
climbed 46 points, or 0.3%, to 13,825.33. Boeing Co.
BA, -0.28%
, up 1.4%, contributed the most to the blue-chip index’s rise, while Cisco Systems Inc.
CSCO, -1.70%
led percent gains.

About 678 million shares traded on the New York Stock Exchange traded hands. NYSE composite volume topped 3.6 billion.

“We are seeing better flows from individual investors into equity mutual funds,” said David Kelly, chief market strategist at J.P. Morgan Funds, pointing to data from the Investment Company Institute showing that nearly $13 billion went into domestic equity funds in the two weeks ending Jan. 16. Read more about the ICI data on mutual-fund flows.

“There are many investors at this stage who want to be better positioned in equities, because if you look at the risks the equity market faces — particularly the fiscal risk — have diminished,” he added.

“There’s nothing specific that happened [to hold the market],” said Dan Greenhaus, chief global strategist at BTIG LLC in New York. “Since the European close or so around 11:30 a.m., there’s just been a steady drift lower in virtually every sector. It’s been a real nice couple of days here. The S&P 500 is up a lot for the month.”

Retail, fronted by a 42% surge in Netflix Inc.
NFLX, +0.89%
shares -- the stock’s biggest gain ever -- led gains for the S&P 500. Tech stocks were the worst among 10 industry groups, ending down 2%, led by Apple after the widely held company’s sales forecasts signaled its rapid growth days were nearing an end. Read more on Netflix and

Some confidence that U.S. lawmakers would resolve a tangle of budget issues facing the nation has helped the benchmark indexes bump closer to record highs touched five years ago, before the credit crisis and deep recession.

On Wednesday the Republican-controlled House of Representatives voted to extend the U.S. debt ceiling until May, giving more time to the White House and Congress to agree on a deal to reduce the deficit.

“Once you reduce risks in this environment, the relative valuation of equities versus fixed income and cash is so compelling,” noted Kelly.

Stocks on Thursday received some support from global economic data. Purchasing managers indexes for China, the euro zone and America all showed improvement in activity. The United States, for instance, saw in January its strongest manufacturing expansion since March 2011.

Other data was also positive. U.S. weekly jobless claims fell by 5,000 to a seasonally adjusted 330,000 in the week ended Jan. 19, marking the lowest level since January 2008. See: U.S. jobless claims drop to 330,000.

The Conference Board said that its index of leading economic indicators rose 0.5% in December, exceeding estimates.

Apple shares sink

Investors, however, also contended with disappointing results from the world’s most valuable company.

Because of its huge market capitalization and wide ownership, Apple can have a big influence on the movement of the broader market. It makes up 10% of the Nasdaq Composite Index and 3.6% of the S&P 500. The stock is held by nearly one-fifth of U.S. mutual funds, according to Morningstar. Read: Apple slams mutual funds — is your portfolio at risk?

Reuters

Netflix CEO Reed Hastings

The decline for Apple weighed on the Nasdaq
COMP, -0.22%
which lost 23.29 points, or 0.7%, at 3,130.38.

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